What are the Best CFD Brokers in India?

What is a CFD or Contract for Difference?

The term CFD is the abbreviation for Contract For Difference.

A CFD is a financial instrument in the category of derivative products. Indeed, the value of a CFD is based on the performance of one or more underlying assets. The assets represented by a CFD can be diverse, such as shares, indices, currencies, commodities, or bonds or cryptocurrencies.

One of the peculiarities of CFDs is that they allow you to speculate on both the rise or fall of the price of a financial asset.

The profit or loss generated when closing the position corresponds here to the difference between the price of the underlying asset at the time of purchase and the price of this asset at the time of sale.

Attention !

81% of retail investor accounts lose money when trading CFDs.

What is a CFD broker?

A CFD broker (or CFD broker) is a trading platform that allows investors to speculate on the price fluctuations of a financial asset without actually owning the underlying asset. CFD stands for "Contract for Difference," a derivative product that reflects the price movement of an asset such as a stock, currency, commodity, or stock index.

A CFD broker provides traders with an interface where they can buy (long position) or sell (short position) a CFD on a given asset. The difference between the entry price and the exit price determines the trader's profit or loss.

The main elements that characterize a CFD broker are:

• Accès aux marchés : Les courtiers proposent généralement une large gamme d'actifs sous forme de CFD, incluant les actions, les indices, le Forex, les cryptomonnaies et les matières premières.
• L'effet de levier : Les traders peuvent utiliser un effet de levier, leur permettant d'amplifier leur exposition au marché avec un capital réduit. Toutefois, cela augmente également le risque de pertes.
• Les frais de trading : Un courtier CFD peut facturer des spreads (écart entre le prix d'achat et de vente), des commissions ou des frais de financement pour les positions maintenues ouvertes pendant la nuit.
• La réglementation : En Inde, les courtiers CFD doivent être enregistrés auprès de la Securities and Exchange Board of India (SEBI) et respecter les réglementations indiennes en matière de protection des investisseurs et de limitation de l'effet de levier.

Types of CFD Brokers: Market Maker vs STP/ECN

When choosing a CFD broker, it is important to understand the differences between Market Makers and STP/ECN brokers. These models influence order execution, fees, and trading experience.

Which type of broker to choose?

• Market Maker: Ideal for beginner traders and those who prefer simple pricing with fixed spreads.
• STP/ECN: Suitable for experienced traders looking for lower costs, greater transparency, and direct market access.

What Regulations and Security are in Place for CFD Brokers in India?

In India, the Securities and Exchange Board of India (SEBI) is the primary regulatory authority overseeing the securities markets. However, SEBI does not currently regulate Contracts for Difference (CFD) trading within the country. As a result, there are no officially recognized regulatory bodies for CFD brokers operating domestically in India. Indian traders interested in CFDs often turn to international brokers regulated by reputable authorities.​

Here are some of the prominent international regulatory bodies:

Since SEBI does not regulate CFD trading in India, there are no specific domestic restrictions or safety measures imposed on such activities. Indian traders engaging with international CFD brokers should be aware of the following considerations:​

• Legal Ambiguity: The legality of CFD trading in India is unclear, as SEBI does not currently regulate it. ​
• Lack of Investor Protection: Trading with brokers outside SEBI's jurisdiction means Indian traders may not have the same level of protection as they would with SEBI-regulated entities. ​
• Due Diligence: It's crucial to conduct thorough research on international brokers, ensuring they are regulated by reputable authorities like the FCA, ASIC, or CySEC.​
• Tax Implications: Profits from CFD trading may be subject to taxation in India. Traders should consult with tax professionals to understand their obligations. ​

Given the regulatory uncertainties, Indian traders should exercise caution and seek professional advice before engaging in CFD trading.

How to Choose a CFD Broker?

Choosing a CFD broker is a crucial step for any Indian trader looking to engage in the financial markets. Several key factors should be considered to ensure the broker aligns with your trading style and offers a safe, regulated environment.

1. Available Assets

A good CFD broker should offer a wide range of financial assets allowing traders to diversify their investments. Here are the main types of assets accessible as CFDs:

2. Regulation of CFD Brokers

Regulation is a fundamental criterion for selecting a reliable CFD broker. Since CFDs are not currently regulated by SEBI in India, traders must rely on offshore brokers that are supervised by trusted international regulators.Here are the most reliable regulatory bodies to look for:

Warning

Avoid using unregulated brokers or those based in offshore tax havens (e.g., Belize, Seychelles, Vanuatu). These brokers often lack transparency and provide no legal recourse for Indian investors.

3. Leverage in India and Elsewhere

Leverage allows traders to control larger positions with a smaller initial investment, potentially increasing both profits and losses. Since CFDs are not officially regulated in India, Indian traders using offshore brokers may encounter widely varying leverage limits.Here’s a comparison of typical leverage levels:

💡 Note on Leverage for Indian Traders
Since SEBI does not set leverage restrictions for CFDs, Indian residents trading through offshore brokers can access high leverage—sometimes exceeding 1:500. While this can be attractive, it also comes with significantly higher risk. Many international platforms offer “protection tools” like stop-losses and margin close-out levels, but these may not be legally enforceable.Professional traders may request higher leverage in exchange for waiving some risk protections, but this is only recommended for experienced users with solid risk management practices.

4. Available Orders

A good CFD broker should offer a variety of trading orders to optimize strategies and better manage risks.

5. Available Features

The best trading platforms offer advanced features that facilitate analysis and order execution.

• Trading Platforms: MetaTrader 4 (MT4), MetaTrader 5 (MT5), TradingView, proprietary platforms.
• Charts and Technical Indicators: Moving averages, RSI, MACD, Fibonacci, etc.
• Analysis and Reporting Tools: Price alerts, trading signals, real-time market analysis.
• Mobile Compatibility: iOS/Android app for trading on the go.
• Trading Automation: Trading robots (Expert Advisors on MT4/MT5) and API for algorithmic trading.
• Customer Service: Assistance in English, 24/7 support via chat, phone or email.

Which CFD broker is best for a beginner Indian trader?

Choosing a CFD broker when you are new to trading can be difficult. Here are the essential criteria for selecting a broker suitable for novice Indian traders.

• Simple and intuitive platform: Choose a broker with a clear interface like eToro or XTB. MetaTrader 4 (MT4) is also a popular option, but a bit more technical. It is recommended to test a demo account before switching to a live account.
• Regulation and security: A reliable broker must be regulated by SEBI or a recognized authority in India. It must guarantee protection against negative balance and segregation of client funds. Avoid offshore brokers (Belize, Vanuatu) that do not protect investors.
• Transparent and competitive fees: Compare the spread (difference between buying and selling price), commissions (some brokers are commission-free on stocks/ETFs), overnight fees (swap) and deposit/withdrawal fees. Opt for a broker with tight spreads and free withdrawals.
• Customer support in English: Check if the broker offers assistance in English via chat, email or telephone, as well as a detailed FAQ. Support available 24/5 or 24/7 is a real plus.
• Educational resources and training: A good broker for beginners should offer video tutorials, webinars and trading guides. A free and unlimited demo account is essential for practicing without risk.

How to Trade CFDs with an Online Broker?

Trading CFDs with an online broker involves several essential steps. Here's a detailed guide to get you started effectively.

1. Choose a Regulated CFD Broker

Before you start trading, it’s essential to choose a secure and well-regulated online broker. Since CFD trading is not regulated by SEBI in India, Indian traders typically rely on international brokers licensed by globally respected authorities like the FCA (UK), CySEC (EU), or ASIC (Australia).
Look for brokers that offer:

• A user-friendly trading platform (like MetaTrader 4/5 or a custom mobile/web platform)
• Competitive spreads and low trading fees
• Support for INR deposits and withdrawals, or seamless international payments
• Customer support that understands the needs of Indian traders

2. Opening a Trading Account

Once the broker is selected, opening an account requires:

• An online registration with your personal information
• An identity verification (identity card, proof of address)
• An initial deposit according to the broker's requirements (often between ₹8,000 and ₹40,000)

Certain brokers offer a demo account to practice risk-free before trading with real money.

3. Choose an asset to trade

CFD brokers offer access to a wide variety of financial markets, both global and regional. For Indian traders, it's common to trade assets that reflect both domestic interests and international trends:

• Stocks: Infosys, Reliance, TCS, Tesla, Apple
• Indices: Nifty 50, Sensex, Nasdaq 100, FTSE 100
• Forex: USD/INR, EUR/INR, GBP/USD, EUR/USD
• Commodities: Gold, Silver, Crude Oil, Natural Gas
• Cryptocurrencies: Bitcoin, Ethereum, Ripple

Choose an asset based on your knowledge, market interest, and risk tolerance.

4. Analyze the market and take a position

Before opening a position, analyze the market with:

• Technical analysis: indicators (RSI, MACD, moving averages) and chart patterns
• Fundamental analysis: economic news, company results, central bank decisions

Next, you can open a position:

• Buy (Long): if you think the price will go up
• Sell (Short): if you anticipate a decrease

5. Defining Leverage and Protective Orders

Leverage allows you to trade larger positions with a smaller deposit, which can boost profits — but also amplify losses. Indian traders using offshore brokers may have access to higher leverage than traders in Europe or Australia.Typical leverage levels:

• 1:500 on major forex pairs (e.g., USD/INR)
• 1:200 on gold and global indices
• 1:20 on stocks
• 1:10 or lower on cryptocurrencies

To manage risk, always use protective orders:

• Stop-loss: Automatically closes your position if the market moves against you, limiting potential loss
• Take-profit: Automatically closes your trade when your target profit is reached

6. Monitor and Close Your Position

Once your position is open, monitor its performance via the broker's platform. Depending on your strategy, you can:

• Manually close your position
• Let your take-profit or stop-loss execute automatically
• Adjust your orders according to the market

Attention!

Positions held open for several days may incur overnight fees (swap), which should be verified with your broker.

7. Analyze Your Performance and Optimize Your Strategy

After each trade, analyze your results to improve:

• Check what worked and what didn’t
• Adapt your risk management and entry/exit strategies
• Use the broker's tools such as trading journals and market analysis

What are the fees of a CFD broker?

CFD brokers apply different fees that influence the profitability of trading. It is essential to understand these costs before opening an account. Here are the main types of fees, with concrete examples.

1. The spread

The spread is the difference between the buying price (Ask) and the selling price (Bid) of an asset. It is the main source of income for commission-free brokers.

Example of CFD spread

A broker offers a CFD on EUR/USD with a spread of 1.2 pips. If you open a position of 1 lot (100,000 units), the cost of the spread will be:

• 1 pip = $10 on a standard lot
• 1.2 pips = $12 fee when opening the position

2. Commissions

Some brokers charge fixed commissions in addition to the spread, particularly on ECN/STP accounts, which offer tighter spreads.

Example of CFD commission

An ECN broker charges a commission of ₹582 per lot on a Forex trade. If you open a 1 lot position on EUR/USD, you will pay ₹291 on opening and ₹291 on closing, i.e. ₹582 in total.

3. Overnight fees (swap)

Overnight fees, also known as swaps, are charged when you hold a position open after market close (10 PM GMT). They are based on the interest rates of central banks.

Example of CFD Swap Fees

You hold a buy position on the CFD EUR/USD with a leverage of 1:30. Your broker applies a swap rate of -0.7 pips per day. If your position is 1 lot, you will pay $7 in overnight fees each night.

4. Inactivity Fees

Brokers may charge inactivity fees if your account remains inactive for a certain period (generally 3 to 12 months).

Example of inactivity fees

A broker charges INR 890 per month after 6 months of inactivity. If you don't trade for a year, you will pay INR 5,340 in inactivity fees.

5. Deposit and withdrawal fees

Some brokers charge fees on bank transactions or withdrawals depending on the payment method used.

Example of deposit and withdrawal fees

A broker charges 1.5% on deposits by credit card and ₹ 450 on each withdrawal by bank transfer. If you deposit ₹ 90,000, you will pay ₹ 1,350 in fees. If you withdraw ₹ 45,000, you will pay an additional ₹ 450.

6. Fees related to leverage

Leverage allows you to trade with more capital than is available in your account, but it can lead to financing costs.

Example of Leverage Fees

You open a position of ₹880,000 with a leverage of 1:2 (the maximum leverage allowed for retail traders in India). Your broker applies a daily financing rate of 0.01% on the borrowed amount (₹862,400). Each day, you will pay approximately ₹86.24 in fees to maintain this position.

What is the best strategy for trading with a CFD broker?

CFD trading allows for a wide range of strategies, tailored to each trader's experience level, investment horizon, and risk tolerance. Below is a table summarizing the most common approaches used by Indian traders, with examples adapted to local and global markets.

What is the taxation on income from CFDs in India?

In India, profits earned from trading Contracts for Difference (CFDs) are subject to taxation. It's crucial for traders to understand the tax implications to ensure compliance and optimize their financial planning.​

1. Taxation Framework for CFD Trading in India

CFD trading in India falls into a regulatory gray area and is not explicitly approved by the Securities and Exchange Board of India (SEBI). Consequently, many Indian traders engage in CFD trading through international brokers. Profits from such trading activities are typically classified as either business income or capital gains, depending on the nature and frequency of the transactions. ​

Note: As of the 2024 Union Budget, the tax rates for STCG and LTCG have been revised to 20% and 12.5%, respectively. ​

2. Offsetting Losses and Taxation of Net Gains

Traders can offset losses incurred from CFD trading against their gains to determine the net taxable income. The tax is then calculated on this net amount.​

Example of Offsetting Losses:

• Gains: ₹500,000​
• Losses: ₹200,000​
• Net Taxable Income: ₹300,000​

In this scenario, tax would be levied on ₹300,000 based on the applicable tax rate.​

3. Reporting CFD Income to Indian Tax Authorities

It's imperative for traders to accurately report all income from CFD trading to the Indian tax authorities. This includes maintaining detailed records of all transactions, such as dates, amounts, and counterparties. Given the complexities and the evolving nature of tax regulations concerning CFD trading, consulting with a tax professional is highly recommended to ensure compliance and accurate reporting.

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.